A banker, Alan Clarke of BNP Paribas, citing a NIESR report, confidently tells the Guardian that the recession is over. Should we take the word of any banker – especially one that claims to be an economist – seriously? Given that the economics profession was blind-sided by the "debtonation" (August 9 2007), I am deeply sceptical. Second, given that this is a banker-induced recession, that reckless and often fraudulent behaviour by bankers led to a loss of $60tn of yours and my wealth (in the form of pensions, equities, lost interest on savings, and lost income from job losses) last year, should we believe a banker's particular spin on the crisis?

I say firmly, no, for a number of reasons, outlined below. But the most important reason for pessimism, in my view, is the hegemonic role played by fiscal conservatives. By raising fears over government deficits, and by refusing to acknowledge that government spending pays for itself, these conservatives have set the economic and political agenda in all the British media, and in every British political party (with the Green party the honourable exception). As a result, Alistair Darling seems hell-bent on committing electoral suicide, with shadow chancellor George Osborne actively encouraging him. The private sector will not be able to rely on the public sector for the stimulus vital to recovery. As things stand, any fragile signs of economic recovery will quickly be crushed by the failure of government to intervene and spend at an appropriate level. Instead, government cutbacks will impact with considerable force on the fragile economy, and will hurt the middle and working classes. As the year proceeds many will discover the true, and often pitiful value of their pensions, and will be hurt by cuts in services and job losses in the public sector. This will hamper recovery and deepen, if that is possible, the alienation of British voters from the Labour government.

Unfortunately, the hegemony of fiscal conservatives reaches far and wide, and includes Germany's chancellor, Angela Merkel, President Sarkozy of France and the US's Federal Reserve governor, Ben Bernanke.

So, at a time of grave private economic failure, cuts in government spending in Europe and the US will arrest recovery. Furthermore, central bankers will have no room for manoeuvre to lower rates further, as they have done this year. Instead, interest rates may well rise at a time when low rates are needed to reflate the deflating body of the global economy.

So, while it must be accepted that the economy seems to have slowed its freefall into the abyss and that there are now fewer jobs to lose and fewer businesses to go bust – there is no real cause for confidence in sustained, or even halting recovery. The real economic outlook remains grim.

All G7 economies will report negative growth in 2009 for the first time in 100 years, according to the Economist Intelligence Unit's senior vice-president, Dr Daniel Thorniley, in a report to the EIU's corporate network. Darling, along with the British prime minister, Gordon Brown, constantly assure us that the "bankers' recession" was not made in Britain, but is a global phenomenon. By this reasoning negative growth in the G7 economies means little chance of recovery for the UK economy.

Foreign direct investment could fall globally by 45% this year, according to the same report, and corporate profits will decline by 20-25%. Global trade is down 25%, and the EIU predicts trade will be down by 10-15% by year end – the worst figure since 1945.

In April this year, consumer prices turned negative in the US, the UK, Germany and Japan. This may be good news for consumers, and may help lower food prices for the poor, but it is not good for the economy as a whole. Businesses cannot profit from negative prices, so they are bankrupted and lay off employees. The rocketing numbers of unemployed (whose plight is seldom taken seriously by orthodox economists) will cut back on borrowing and shopping and may even default on loans. This is not good news for the productive sector of the economy, and it's very bad news for the banking sector. Banks have still not fully de-leveraged the debts on their balance sheets. Now, thanks to rising unemployment, non-performing loans are "set to rise sharply around the world over the next 12-18 months" according to the EIU. This is very scary, if one considers that there are still $600tn of liabilities in the form of derivatives on balance sheets out there – backed up by a mere $38tn of so-called credit default swaps (in reality a form of insurance on derivatives).

Finally, the rising price of oil seems set to exacerbate this dismal economic outlook. To everyone's surprise, it has been rising lately and is now at $71. This is strange, because as Business Week's Stanley Reed reports, "stockpiles are so high that an ocean of oil is building up around the world in tankers or in depots". Yet the price of US crude has almost doubled. While Opec has cut back and maintained quotas of production, and contributed substantially to the price rise, it turns out that once again, the finance sector is playing fast and loose in oil markets. Göran Trapp, head of global oil trading at Morgan Stanley in London is quoted as saying: "Hedge funds and asset managers who have been sitting on cash now feel it's time to buy [oil]." $3.8bn has flowed into oil and gas exchange traded funds this year, versus $1.4bn in the first half of 2008.

The US and British governments appear relaxed, even passive, about the impact of hedge-fund speculation on the oil price and the global economy. Indeed they seem determined to maintain the dominant status of the finance sector within the economy. Banks that are "too big to fail" are not just tolerated, but encouraged in their morally hazardous behaviour. In Britain, the Labour government has actively helped consolidate the banking sector, and shrink the competition, as the forced Lloyds/HBOS merger demonstrated. Hedge funds remain free to gamble in the casino that is the global economy.

Nothing has been done to restructure the global economy and limit financial imbalances – including Anglo-American deficits and the Chinese surplus. Indeed these matters were not even discussed at the last G20 summit. Big, reckless money continues to be made from currency speculation, just when the global economy requires currency stability.

We – employees, consumers, investors and borrowers – have been misled and fooled by the economics profession and finance sector for years before this crisis. As a result of our gullibility, we lost $60tn of wealth in the past year. We would be wise now to dismiss their vain efforts at confidence-boosting, and instead rest our judgments on the real world economic outlook.